Global markets breathed a collective sigh of relief today as eurozone finance ministers approved Greece’s reform programme, setting the path for a four month extension of the current rescue package. Giving further credence to the deal, which was negotiated after a tense stand-off between Greece and its eurozone creditors which saw previous deadlines missed, the European Commission signed off on the deal stating that the revised terms were “sufficiently comprehensive to be a valid starting point for a successful conclusion of the review.”
The six page document submitted by Yanis Varoufakis, Greece’s finance minister, outlined the commitment to work closely with eurozone officials while including a commitment to conduct a thorough public spending review, cuts in non-essential spending and a pledge to clamp down on corruption, tax evasion and fraud. Despite the progress being made the euro was little changed against the dollar after the announcement, holding tentatively in negative territory after lifting off 1.13 against the dollar, trading around 1.1330 during the afternoon before slipping back below 1.13 towards the European close.
At the time of writing, US markets were trading tentatively higher on mixed US economic data. Despite a stronger than expected Markit services PMI reading, coming in at 57.0 in February against expectations of a 54.5 preliminary reading, investors were approaching equities with renewed caution today ahead of Yellen’s testimony before the Senate.